Demand for the dollar weakened over the week, as reflected by the Lebanese pound’s peg against the dollar that went from $/LP 1,509-1,513 with a mid-price of $/LP 1,511 to $/LP 1,508-1,512 with a mid-price of $/LP 1,510 this week. Foreign assets (excluding gold) at the Central Bank remained almost constant, decreasing by a monthly 0.01% to $37.86B by end-January. Meanwhile, the dollarization rate of private sector deposits stood at 65.68% in November 2014 compared to 66.13% in December 2013.
The euro strengthened as traders speculate that the Swiss National Bank was buying euros again to weaken the franc. This caused the euro to strengthen against the dollar by 1.25%, ending the week at €/$ 1.1455.
China’s move to cut reserve requirements to stimulate growth and fight deflation bolstered demand for gold during the week. The price of gold increased from $1,256.50/ounce on Thursday 29th of January 2015 to $1,264.40/ounce this week.
By Friday February 6th, 2015, 12:30 pm Beirut time, the dollar-pegged LP depreciated against the euro, going from €/LP 1,705.59 the prior week, to €/LP 1,726.84 The Nominal effective exchange Rate (NEER) gained 1.82%, over the week to 157.02points, with its year-to-date gain reaching 6.58%.